Alcohol

Illicit Trade in Alcohol

​Well beyond the problem of brand counterfeiting, this industry suffers from a high magnitude of illegally produced alcoholic products, typically those manufactured in unlicensed distilleries or people’s homes and destined for sale.

​Based on its seizure records in 2015, the World Customs Organization confirmed that “in many instances, these products are produced using other, cheaper types of alcohol which can have serious adverse health effects. Commonly used substitutes for ethanol include chemicals used in cleaning fluids, nail polish remover and automobile screen wash, as well as methanol and isopropanol which are used in antifreeze and in some fuels”. The World Health Organization estimated that a quarter of total worldwide adult alcoholic consumption stems from unrecorded sources, i.e. alcohol that is sold outside normal government controls (WHO, 2014).

In addition to the serious health risk for consumers, the illicit trade in alcohol results in substantial losses in tax and duty revenue for governments. For industry, the main impact relates to lost market shares, costs related to intellectual property theft, reputational damage and lost consumer trust.